If this is your first visit, be sure to
check out the FAQ by clicking the
link above. You may have to register
before you can post: click the register link above to proceed. To start viewing messages,
select the forum that you want to visit from the selection below.

After two-months of fence-sitting, Illinois Governor Pat Quinn today signed controversial legislation requiring Internet retailers like Amazon.com and Overstock.com to collect Illinois’ 6.25% sales tax if they have affiliate sellers in the state. House Bill 3659, the Mainstreet Fairness Bill, was passed by the state’s lame duck legislature in early January. Since then, the bill has been the subject of fierce lobbying by traditional bricks and mortar retailers, who supported it, and Illinois-based Internet-only businesses, who warned that if Quinn didn’t veto it some of them would flee the state. Had Quinn done nothing, the bill would have become law tomorrow without his signature.

Amazon has already said it will terminate its Illinois affiliates, just as it has said it will drop 10,000 California based “associates” if similar legislation pending in that state becomes law. Affiliates are paid a fee by Amazon and other retailers for sales brought in through advertisements and links on the affiliates’ web sites. In an escalating PR war, Wal-Mart, Sears, Best Buy and Barnes & Noble have all issued public invitations to Amazon’s spurned associates to join their affiliate marketing programs instead. Yesterday, the Alliance for Main Street Fairness, a bricks and mortar retailers organization, even announced a new web site to connect affiliates “about to get thrown under the bus” by online-only sellers with retailers who already collect sales taxes on line. Quinn’s office said today that the affiliate matchmaking service had been launched at his request.

In a statement, Scott Kluth, founder and CEO of Chicago-based CouponCabin.com called the Governor’s approval of the bill “deeply disappointing” and said he is “actively exploring” moving his seven year-old business to Indiana. Kluth, a long time resident of Chicago, had previously threatened such a move, telling Forbes, “I can see Indiana form the roof of our business.”

But Quinn, a Democrat, described the law as necessary to put the state’s “main street businesses” on “a level playing field” with online retailers and to protect main street jobs. In a statement issued by Quinn’s office, David Vite, president of the Illinois Retail Merchants Association praised the law as a matter of “fairness for retailers, fairness for the economy but most importantly, fairness for taxpayers.”

But Quinn, a Democrat, described the law as necessary to put the state’s “main street businesses” on “a level playing field” with online retailers and to protect main street jobs. In a statement issued by Quinn’s office, David Vite, president of the Illinois Retail Merchants Association praised the law as a matter of “fairness for retailers, fairness for the economy but most importantly, fairness for taxpayers.”

The ignorance of this statement is just confounding. Those "main street business[es]" are already on a level playing field with online retailers as there is nothing barring those business from retailing online. This is simple intrastate protectionism, the type of behavior the commerce clause was specifically designed to curtail.

"In England a king hath little more to do than to make war and give away places; which in plain terms, is to impoverish the nation and set it together by the ears. A pretty business indeed for a man to be allowed eight hundred thousand sterling a year for, and worshipped into the bargain! Of more worth is one honest man to society and in the sight of God, than all the crowned ruffians that ever lived."
—Thomas Paine, Common Sense